As a business counselor for the Anne Arundel County Small Business Development Center, Hollis Minor has noticed some commonalities among young businesses that have managed to attain stable growth.
The entrepreneurs who make it past the startup phase are those who not only keep careful track of “the numbers” — whether that means dollar figures or inventory tallies — but also intuitively understand what those numbers are telling them, said Minor.
“They don’t necessarily need to know accounting per se, but they need to be able to read their accounting reports and know what they are telling them,” she said. “They are packed with intelligence to guide decision-making and next steps.”
Too many entrepreneurs focus on getting a service or product perfected, and many entrepreneurs serve customers well, she added. But they don’t know if their pricing and business model are sustainable, let alone stable enough for growth.
Another key to getting a company from infancy to youth is to research exhaustively, she suggested. “Successful businesses need to become experts in their fields and industries and know everything there is to know about their competitors. Today there are hundreds of competitors in every imaginable space out there.”
Shift With Customers’ Needs
For information technology (IT) companies, trends and potential markets move so quickly that entrepreneurs in this sector often find themselves with young companies that are already obsolete.
Fred Brechbiel, a self-titled “serial entrepreneur,” has taken several IT companies from early stages into stable early years, then proceeded to “morph” the same company into another, sometimes altogether different, product.
Most recently the founder of Envidient, based in Dunkirk, Brechbiel incorporated his latest company in August 2010. Envidient designs QR codes, a barcode read by smartphones, and mobile web sites for clients across the globe. “I started my career as a computer scientist at NASA, then I traveled around doing software training for the Department of Defense.”
Then the Internet came into maturity as a widely-used tool, and Brechbiel’s life changed.
He launched a company known as Chesapeake.net, an Internet service provider that is now a $2.5 million business. Still president and CEO of Chesapeake.net, Brechbiel formed Envidient as an offshoot of that company.
Within a few years, Brechbiel branched out to start a web site hosting company that served many online news clients. But then newspapers began to die, he said, and it was time to move on to the next idea.
“Around that time, we heard about QR codes.” Brechbiel and his partner did their research, and noticed that QR codes were popular in Japan, then Europe, then Australia. They predicted — correctly — that they would soon storm the United States.
“We now have more than 875 subscribers worldwide, on every continent except Antarctica,” he said.
Competition – Or Good Company?
In central Maryland’s Howard County, the majority of young companies are in the IT sector. “I believe this is because of the proximity to government agencies,” observed Tim Harwood, new business development manager for the Howard County Economic Development Authority.
Harwood said that, as more young IT companies settle in Howard County, they attract their own competition — which from an economic development perspective turns out to be a positive trend. “Like attracts like in terms of companies,” he said.
But entrepreneurs don’t have to be in Howard County or in the IT sector to appreciate the value of competition. In Calvert County, Cindy Selby, owner of Blondie’s Bakery, prides herself on baking from scratch and avoiding food chemicals. Now nearly 2 years old, the bakery has been seeing an average of 25% monthly growth — and sometimes up to a 90% monthly growth.
Selby said she actually would welcome the addition of more bakeries like her own. “The more bakeries like ours, the more people will be educated about food chemicals,” she said.
From Bulldogs to Bully Bling
The key for entrepreneurs who want to make themselves stand out from the crowd of competitors is defining a competitive differential, or, said Hollis Minor, “why someone should buy from them over all the other firms doing the same thing.”
For entrepreneur Vic Guido, this meant making a drastic move from selling bulldog collars and accessories to selling an energy drink called “Bully Bling.”
Guido, a serial entrepreneur, said that “Bully Bling” is not yet the most successful venture in which he’s been involved, but he anticipates it being the most successful one day. He cites strong regional support and effective business partners as the factors that most feed into a successful young business.
Guido was making a profit selling bulldog collars, which are thicker than regular dog collars because of the strength of a bulldog’s neck, but it was not enough to make a living, he said. Now the only aspect of that previous business he retained is the name — Bully Bling — and a bulldog logo. The drink’s energy factors come from a dose of B vitamins and caffeine.
“We manufactured and received our first delivery in December 2010,” he said. Starting with a single regional convenience store — Burchmart — Bully Bling now sells not only in Maryland but in Pennsylvania, Virginia, Florida, North Carolina, Boston and New York, as well. “We have goals of being in 20 states by 2013.”
Whether entrepreneurs are marketing IT, cookies or energy drinks, establishing a clear identity is vital to edging out the competition, concluded Minor. “It must be a core part of their positioning and messaging.”